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CIRCULAR No.825/2000/TT-BKHCNMT OF MAY 3, 2000 GUIDING THE IMPLEMENTATION OF DECREE No. 12/1999/ND-CP OF MARCH 6, 1999 ON SANCTIONING ADMINISTRATIVE VIOLATIONS IN THE DOMAIN OF INDUSTRIAL PROPERTY

In furtherance of Article 23 of Decree No.12/1999/ND-CP of March 6, 1999 on sanctioning administrative violations in the domain of industrial property (the Decree for short), the Ministry of Science, Technology and Environment hereby guides a number of concrete points for the implementation of the Decree.

I. OBJECTS AND PRINCIPLES OF SANCTIONS, APPLICATION OF RELATED REGULATIONS

1. Objects of sanctions

Objects of sanctions for administrative violations in the domain of industrial property are stipulated in Clauses 2 and 3, Article 2 of the Decree and are subject to the stipulations in Article 5 of the Ordinance on Handling of Administrative Violations promulgated on July 6, 1995 (hereafter called the Ordinance for short).

1.1. Under these stipulations, all subjects gathering all the following conditions shall be sanctioned under the Decree:

- Individuals aged full 16 years and older or organizations and other entities;

- Committing any of the acts of administrative violation related to industrial property stipulated in Chapter 2 of the Decree (whether intentional or unintentional) and such act does not include elements constituting a crime;

- The said act of administrative violation is committed on the Vietnamese territory;

- The said act of administrative violation is committed in the statute of limitations provided for in Article 4 of the Decree.

1.2. Under the above stipulations, individuals aged from 14 to under 16 years who intentionally commit an act of administrative violation in industrial property in the above said locality and within the above said time limit shall also be sanctioned under the Decree.

1.3. Foreign individuals and organizations that commit acts of administrative violation related to industrial property in Vietnam shall also be sanctioned under the Decree, except otherwise provided for by the international agreement to which both Vietnam and the country of which this organization or individual bears the nationality have acceded to. In this case, the handling of the administrative violation shall comply with the above-said international agreement.

2. Principle of sanctioning

The sanctioning of administrative violations in the domain of industrial property must comply with the stipulations and principles on sanctioning in Article 3 of the Ordinance and Article 3 of the Decree. When applying these principles, attention must be paid to the following issues:

2.1. Principle of right competence

Only persons with competence stipulated in Chapter 3 of the Decree can issue a decision to sanction an administrative violation in the domain of industrial property with the form and level of sanction within their prescribed competence. It is not allowed to split a violation into several small violations or to group several small violations into a major violation with the aim of changing the sanctioning competence.

2.2. Principle of right object

All objects that have committed acts of administrative violation in the domain of industrial property mentioned in Point 1 of this Circular shall be sanctioned under the Decree. All other objects that do not fall into the cases stated at that Point shall not be sanctioned under the Decree.

One object that commits several acts of violation shall be sanctioned for each act. Many objects that commit together an act of violation shall each be sanctioned.

2.3. Principle of right extent

The form and level of sanction against an administrative violation in the domain of industrial property must be compatible with the nature, seriousness and consequence of such act of violation. Nevertheless, when determining the form and level of sanction, the personal record of the violator and the aggravating or extenuating circumstances must also be considered in order to take an appropriate decision.

2.4. Principle of timeliness and thoroughness

All organizations and individuals have the right and obligation to detect in time acts of administrative violation in the domain of industrial property. These findings must be notified to the persons competent to impose administrative sanctions. When receiving the notice or when requested to handle an administrative violation in the domain of industrial property, the competent person must immediately proceed with necessary procedures to ensure that such a violation be stopped immediately and its consequences be overcome.

2.5. Principle of conformity with procedures

The sanctioning of administrative violations in the domain of industrial property must be effected according to the procedures stipulated in Articles from 45 to 56 of the Ordinance and Articles from 14 to 20 of the Decree.

3. Application of prescriptions of the legislation on industrial property

When imposing a sanction against administrative violations in the domain of industrial property, the person with sanctioning competence shall not only have to base himself/herself on the provisions of the Ordinance and the Decree, but also on the stipulations on the contents and procedures of protecting the industrial property rights stipulated in Chapter 2, Part VI of the 1995 Civil Code as well as related provisions mentioned in Decree No. 63/CP of October 24, 1996 of the Government providing in detail for the industrial property (hereafter called Decree No. 63/CP for short), Circular No. 3055/TT-SHCN of December 31, 1996 and this Circular of the Ministry of Science, Technology and Environment.

II. DETERMINING ACTS OF VIOLATION RELATED TO INDUSTRIAL PROPERTY RIGHTS

4. Scope of guidance

Articles 5, 6, 7, 8 and 9 of Chapter 2 of the Decree provide for five types of acts of administrative violation in the domain of industrial property. These stipulations are clear enough for the implementation and application. The following are only further guidance and explanation for determining different types of violation directly related to the specific industrial property right (Articles 5, 6 and 9).

5. Acts of violation related to the process of establishing and exercising the industrial property rights and filling in the procedures for granting permits (or registration) for industrial property representation service activities (Article 5 of the Decree)

The common characteristic of this type of violation is that the violator deliberately uses dishonest measures aimed at misusing the regime of protection of industrial property rights for personal benefits or to conceal other acts of violation of law. Following are some examples:

5.1. Act of carrying out the procedures to establish and exercise industrial property rights to evade or conduct acts in other domains prohibited or restricted by law (Article 5.1a). The following acts fall into this type of violation: on the pretext of the payment of fees when registering industrial property rights in foreign countries or the payment for foreign licenses to transfer money abroad, or create false payments under the cover of transfer or assignment of industrial property rights, etc.

5.2. Act of carrying out the procedures for establishing or exercising industrial property rights in order to conduct unfair competition, monopoly, unlawful market manipulation, destroying the industrial property objects, restricting or narrowing the scope of protection of industrial property rights of others, misusing or lowering the commercial prestige of other production and business establishments (Article 5.1.b.). The following acts belong to this type of violation:

a/ Misusing the registration of industrial property rights to complain or denounce groundlessly aimed at impeding production and business activities of others;

b/ Expanding groundlessly the scope of protection when filling in procedures for establishing industrial property rights by intentionally not supplying the information of one?s knowledge or the information that one has the obligation to know to the competent agency, leading to incorrect determination of the known situation related to the object of protection, thereby to control and impede production and business activities of others;

c/ Buying industrial property rights (e.g. license) aimed at nullifying the competitiveness of others and eventually seizing monopoly in controlling the market;

d/ Filling in procedures for registration of industrial property rights not for use but to impede others from producing or doing business in relation to the registered object...

6. Acts of violating the stipulations on indications related to industrial property (Article 6 of the Decree).

These acts violate the stipulations in Article 54 and Article 66 of Decree No. 63/CP and cause consequences that damage the interests of consumers.

6.1. False indications on the industrial property owner (Article 6.1.a).

Article 66 of Decree No. 63/CP provides that only the industrial property object owner (industrial property owner) can use indications and only within the time-limit of protection can indications be used to indicate that the product is protected or under his/her/its exclusive right (including symbolized indications) on the products while making advertisement or during transactions for business purpose. If such indications are used when one is not an industrial property owner, it is a violation of this type.

To determine whether an act is a violation of this type or not, it is necessary to identify the industrial property owner as guided in Point 7.2 of this Circular.

6.2. False indication on products or services bearing elements under protection (Article 6.1.b).

The following acts belong to this type of violation:

Printing on goods or goods packages the words "Registered trademark" or "This is a protected trademark" or "the exclusive trademark of..." including the symbol â (which is widely used to indicate that the trademark has been registered); or other similar indications to claim that such goods are protected as inventions, utility solutions or industrial designs including the printing of the word "P accompanied with numerals" (P being the symbol used widely to indicate that the product has been granted an invention patent) which in fact is not the case.

To determine whether an act is a violation of this type or not, it is necessary to identify the object of protection according to the guidance at Point 7.2 of this Circular.

6.3. False indication that the products are manufactured or services are provided under license (Article 6.1.d)

The printing on the products the words "manufactured under license of..." or "provided under license of" or terms with similar meaning whether in Vietnamese or in foreign languages, while in fact it is not the case, shall be regarded as a violation of this type.

6.4. Failing to indicate that the product is manufactured or the service is provided under license (Article 6.2.a)

If a product is manufactured under industrial property license (also if it is manufactured under the production license of another person and carries the use trademark under the license of the person who authorizes the manufacture), or if the service is provided under an industrial property license but on the corresponding product or the corresponding service there is no indication of this, this failure shall be regarded as a violation of Article 66 of Decree No. 63/CP and shall be classified as a violation of this type.

6.5. Failing to indicate or unclearly and/or inadequately indicate on the product that it is "Made in Vietnam" for those products that must bear such indication (Article 6.2b).

Under Article 66 of Decree No. 63/CP, if the product is manufactured in Vietnam under a foreign license or if the product is manufactured in Vietnam and bears a trademark that may cause the misunderstanding that the product comes from a foreign country or of foreign origin, the inscription "Made in Vietnam" must be written in full, not in abbreviation. Failing to make such an inscription shall be considered as a violation of this type.

7. Acts of violating the regulations on protection of industrial property rights (Article 9 of the Decree)

Violations described in Article 9 of the Decree are acts of violating the rights regarding inventions, utility solutions, industrial designs, trademarks, appellations of origin of goods under protection. In application of the stipulations at this Article, the person with sanctioning competence must clearly determine the legal status related to the protected object, more concretely: who is the owner of the industrial property, the object of protection, the scope of protection, the time-limit of protection and who is permitted to use the protected object without being considered infringing upon the protected rights. To properly determine the above contents, it is necessary to grasp firmly and abide by the stipulations in Chapter 4 and Chapter 5 (Articles from 33 to 54) of Decree No. 63/CP. Following are some additional explanations and guidance related to this type of violation:

7.1. General principle to determine that an act has infringed upon industrial property rights:

To affirm that an act has infringed upon industrial property rights, there must be all the following factors:

- The said act is the execution (performance) of one of the acts of using the object of industrial property (invention, utility solution, industrial design, trademark, appellations of origin of goods) mentioned in Points a, b, c, d, e, f, g, h, i, Clause 1, Article 9 of the Decree;

- The performer of such act is not the industrial property owner (the method of determining the industrial property owner is mentioned in Point 7.2 of this Circular); in case the used object is an invention or a utility solution or an industrial design, the performer of the above act of using is neither the industrial property owner nor the prior-user of such invention, utility solution or industrial design (prior-user is stipulated in Article 50 of Decree No. 63/CP).

- The above act is performed in the protection time-limit inscribed on the title of protection issued to the industrial property owner and is performed in Vietnam.

7.2. Method of determining the industrial property owner

Under Clause 2 and Clause 3, Article 1 of the Decree, the "industrial property owner" may be one of the three following entities with regard to industrial property rights: owner of the title of protection, owner of the international registration of the trademark and the lawful transferee of industrial property rights. The determination of the industrial property owner shall be made on the following bases:

a/ "Owner of the title of protection" is an organization or individual that is granted a title of protection, more concretely: this individual or organization is recorded as "title owner" in the patent of invention, patent of utility solution, patent of industrial design or is recorded as "certificate owner" in the certificate of registered trademark, certificate of the right to use the appellation of origin of goods, certificate of industrial design (granted under the 1989 Ordinance on Protection of Industrial Property Rights).

b/ "International trademark registration owner" is a foreign organization or individual that has internationally registered the trademark under the Madrid Agreement and such registration has been accepted in Vietnam; more concretely, the organization or individual has been registered as owner of registration in the announcement of the International Office of the World Intellectual Property Organization (WIPO) in which Vietnam is indicated and, with certification by the Industrial Property Office that such registration has been accepted by Vietnam.

c/ "Legal transferee of industrial property rights" is an organization or individual that has been legally assigned the property right over the invention, utility solution, industrial design, trademark. More concretely, such organization or individual has been recorded as "Receiving party" in the certificate of registration of the contract on transfer of ownership right over the industrial property object granted by the National Office of Industrial Property.

d/ The "legal transferee of industrial property right" may also be the organization or individual that has been legally transferred the use right (license) of the invention, utility solution, industrial design, trademark. More concretely, this organization or individual has been listed as "Receiving party" in the certificate of the license contract registration granted by the National Office of Industrial Property (including non-voluntary license).

The titles of protection (patent of invention, patent of utility solution, patent of industrial design, certificate of trademark registration, certificate of the right to use the appellation of origin of goods, certificate of industrial design) and certificates of registration of contract on transfer of industrial property rights are only valid as grounds to determine the industrial property owner as well as the scope and object of industrial property rights in application of the Decree so long as these papers are still within the effective time limit.

7.3. Method of determining violation elements:

Violation element (Clause 4, Article 1 of the Decree) is the concrete manifestation of the result of the acts of infringing upon the right over an invention, utility solution, industrial design, trademark, appellation of origin of goods, and is the most important ground to determine such an act.

a/ Violation elements against inventions or utility solutions may come under one of the following three forms:

- Product or part of product is identical to a product or part of product being protected as an invention or utility solution;

- Product-manufacturing process is identical to product- manufacturing process which is being protected as an invention or utility solution;

- Product or part of product is being manufactured according to a process identical to the process being protected as an invention or utility solution.

To determine the identity between the infringing product and the protected product, between the infringing process and the protected process, it is necessary to compare all the technical specifications of the product/process with the specifications of those being protected and only if all these technical specifications of the infringing product/process are present in the grouping of, technical specifications of the protected product/process, can such a conclusion as above be made.

The comparison must be based on the description of the invention and the description of utility solution and the request for protection of the invention and the utility solution attached to the invention patent and the utility solution patent which have determined the technical specifications of the product or process under protection.

b/ The violation elements against an industrial design is a product, the outer appearance of which or of a part of which is identical to an industrial design being protected, or identical to the basic shaping components of the industrial design being protected.

To determine if a product is a violation element against the industrial design or not, a comparison must be made between all shaping features (figure, mass, colors) of the product or part of the product and the shaping features of the industrial design in the industrial design patent (or the certificate of registration of industrial design granted under the 1989 Ordinance on Protection of Industrial Property Rights). Only when all the features of the whole product or part of the product are identical to the shaping features mentioned in the industrial design patent or to the features of the substantial shaping component of the industrial design mentioned in the industrial design patent can it be affirmed that this product is a violation element against the industrial design.

c/ The violation element against a trademark and an appellation of origin of goods may be in one of these two forms:

- The sign that stands as a trademark of goods, or

- Indication that causes to think of the trademark or origin of goods.

The violation elements being signs are all signs that may be used as trademark (letters, numerals, images, symbols and marks) printed or pasted on the goods, goods packing, service facilities and transaction papers, signboards and advertisements identical or mistakenly similar to a trademark or appellation of origin of goods being protected.

The violation elements being indications are all information presented on the goods, packing, service facilities, transaction papers, signboards and advertisements (presentation, legend, symbol) leading consumers to confusion about the origin, and relationships between the goods or services and the goods or services having a trademark or appellation of origin of goods being protected.

To determine whether a sign or indication is a violating element against the trademark, the appellation of origin of goods or not, a comparison must be made between this sign or indication and the trademark and appellation of origin of goods being protected as well as between the product or service bearing these signs or indications and that on the list of products and services presented in the trademark registration certificate or the certificate of the right to use appellation of origin of the corresponding goods. The following points must be given attention when a comparison is made:

- A sign shall be considered identical to a trademark or an appellation of goods origin under protection when both these conditions are met:

First condition: The sign has a structure, presentation, color, pronunciation (for a letter sign), and implication fully identical to the structure, presentation, color, pronunciation and implication of the trademark or appellation of origin of goods being protected; and

Second condition: The goods or service bearing this sign lies on the list of products and services having been registered in the certificate of trademark registration, or the certificate of the right to use the appellation of goods origin.

- A sign shall be considered mistakenly identical to the trademark or appellation of goods origin being protected if one of these two circumstances happens:

First circumstance (identical in sign and similar in product):

That sign has a structure, presentation or pronunciation (for a letter sign), and color and implication completely identical to the structure, presentation, pronunciation, color and implication of the trademark and appellation of origin of goods being protected; and

The goods or service bearing that sign is similar or related in function and use to the goods or service registered in the certificate of registration of trademark, or the certificate of the right to use the corresponding appellation of goods orgin;

Second circumstance (similar in sign and identical in product):

The sign has a number of characteristics in structure, presentation, pronunciation (for a letter sign), color and implication completely identical or mistakenly similar to the trademark or appellation of origin of goods being protected; and

The goods or service bearing that sign lies on the list of products or services registered in the certificate of registration of trademark, or the certificate of the right to use the appellation of origin of goods.

8. Some points that must be given special attention when applying Article 9 of the Decree

When determining the act of infringing upon industrial property rights and when sanctioning under Article 9 of the Decree, the sanctioning person shall have to pay special attention to the following questions:

8.1. Exceptional cases which are not considered an infringement of industrial property rights:

Under Article 803 of the 1995 Civil Code and Clause 3, Article 53 of Decree No. 63/CP, the following acts shall not be considered as infringement of the industrial property rights and shall not be handled according to the Decree:

a/ Using the objects of industrial property under protection not for business purpose (in other words, this use is not a commercial act, e.g. use for experimentation in scientific research, teaching or for non-profit community purposes, or in service of individual needs);

b/ Using the object of industrial property on means transiting or temporarily staying in Vietnam only to maintain the operation of this means;

c/ Using the object of industrial property put into circulation by the prior-user (as stipulated in Article 50 of Decree No. 63/CP);

d/ Using or conducting activities of a commercial character (importing, selling, storing for sale, offer for sale, sale promotion) of products or goods already put into circulation by the industrial property owner on the market (including foreign market).

The fourth exception is very often seen in the process of settling disputes and complaints regarding violations of industrial property. Below are some instances of this case:

- Commercial activities with products and goods containing elements under industrial property protection supplied by other persons (distribution, sale) and the supplier is actually the industrial property owner (protection title holder, license grantee). These activities shall not be considered a violation, whether the supply of the goods or products is conducted in Vietnam or abroad.

- Parallel import: The import of goods or products containing elements under industrial property protection originally supplied not by the industrial property owner but by the license grantee or a distribution recipient or an affiliate or a branch... shall not be considered a violation.

If the person who is denounced as an offender deems that his/her act falls into an exceptional case, he/she has the right and obligation to prove that such act belongs to the exceptional cases. Failing to do this, he/she shall not be eligible for the right of exception mentioned above.

8.2. Impact of the change of effectiveness of title of protection:

The effectiveness of a title of protection may be changed: the scope of protection of the industrial property object may be restricted or suspended or annulled. This change shall affect the determination of the act of violation mentioned in Article 9 of the Decree. In order to assure justice and fairness in the handling of violations, upon notice of the competent industrial property agency on the possibility or decision on a change to the effectiveness of the title of protection, the person with sanctioning competence shall have to study and issue a decision compatible with a new effective scope.

III. APPLICATION OF FORMS AND LEVELS OF SANCTION AND MEASURES OF HANDLING

9. Warning

Sanctioning form of warning as stipulated in Clause 1, Article 3 of the Decree applies only to cases where sanctioning by warning is stipulated in corresponding articles and clauses of the Decree and shall apply to violations with the following characteristics:

- First violation, small scale, not causing substantial damage to the industrial property owners and consumers;

- Due to backward educational level, lack of knowledge of the legislation on industrial property and causing no substantial damage to the industrial property owners and consumers;

- Caused by the violation of another of which the violating person is unaware or does not have plausible reasons to know, including deception in the process of signing an agreement or the performance of a contract for production and business where it is not obligatory to know about the related industrial property issue.

10. Fines

Sanctioning by fines shall be applied when the violation is deemed not liable to sanctioning by warning. The levels of fine are stipulated as follows:

10.1. When the violation does not involve aggravating or extenuating circumstances, the level of fine shall be the average level in the fine bracket;

10.2. Where one of the following extenuating circum-stances is involved, the fining level shall be lower than the average down to the minimum level in the fine bracket;

- The violation is caused by the backward perception level, or lack of knowledge about the legislation on industrial property;

- The violation is caused by the violation of others of which the violating person is unaware or does not have any plausible reason to know but is bound by law to know about the related industrial property issue (e.g. about legislation compelling the processor of export goods to assure the lawfulness of the trademark used for the product or to ask the processee to write a pledge that he/she bears responsibility for the use of trademark for the products but the processor has not complied with these regulations);

- The offender has voluntarily suspended the act of violation and taken measures to prevent or reduce the damage, such as stopping producing or selling the violating goods when requested by the industrial property owner or the competent State agency;

- The offender has seriously complied with the requests of the industrial property owner or the competent State agency, voluntarily overcome the consequences such as recouping the violating goods, announcing corrections and apologies, and voluntarily paying compensations for damage to the industrial property owner.

10.3. Where the violation involves one of the following aggravating circumstances, the fine level shall be above the average to the maximum level in the fine bracket:

- Organized violation;

- Oft-repeated violation;

- Deceiving, misusing the lack of knowledge of others or their dependence on economic and social questions to incite or urge or compel them to commit the violation;

- Taking advantage of war-time conditions, natural disasters or exceptional economic and social conditions to commit the violation;

- Committing the violation while in the period of carrying out the verdict of a criminal sentence or a decision to handle an administrative violation for a criminal act or an act of violation in the domain of industrial property;

- Committing an act of evading or concealing the violation after the violation.

The determination of the fining level in the fine bracket with aggravating circumstances stipulated in Clause 2, Article 9 of the Decree shall apply the principles similar to those applied to the determination of a fine level in the ordinary fine bracket.

11. Stripping of the right to use licenses:

11.1. Stripping of the right to use licenses is an additional form of sanction. It cannot be used independently but only in conjunction with the main sanction (warning or fine) when the competent person deems there are enough grounds and conditions for application, as follows:

- There are provisions allowing the application of the form of stripping of the right to use the license for the related act of violation at a concrete article, clause or point in Articles from 5 to 9 of the Decree; and

- The realistic factors of the violation belong to one of the cases prescribed at Clause 1, Article 16 of the Decree. These factors must be fully recorded in the violation record.

11.2. The conditions for considering application of the form of stripping of the right to use licenses definitely or indefinitely shall comply with stipulations at Clauses 2 and 3, Article 16 of the Decree. The time-limit for stripping of the right to use license must correspond with the violation character and extent of the specific act and lie within the time limit allowed for such acts as provided for in the corresponding articles, clauses and points of Articles from 5 to 9 of the Decree.

11.3. The competence in stripping each type of license shall comply with Articles 10 and Article 11 of the Decree. The business licenses stipulated in the Decree may be business licenses, business registrations, investment license? depending on specific instances as stipulated in the current law. The industrial property representation service license, depending on each specific case, may be the certificate of an industrial property representation service organization or card of industrial property attorney stipulated in Decree No. 63/CP. Where the person with sanctioning competence does not have the competence to strip the right to use licenses (such as the investment license issued by the Ministry of Planning and Investment), the person with sanctioning competence shall make a written proposal attached to the dossier on the case asking the agency that issues the license to handle it.

12. Confiscation of material evidences and means of violation

12.1. The confiscation of material evidences and means of violation can only be applied in conjunction with the main forms of sanction when the competent person deems that there are enough grounds and conditions for application. More concretely:

-There are provisions allowing the confiscation in respect of related acts of violation in the specific articles, clauses and points in Articles from 5 to 9 of the Decree and realistic factors of the violation fall into one of the cases stipulated at Clause 2, Article 18 of the Decree. These factors must be fully recorded in the violation record;

-Violation elements cannot be removed from the products, goods, business means, service means.

12.2. Confiscation of violating goods as stipulated in Point c, Clause 2, Article 18 can be applied only when the competent person has made a request and fixed a reasonable time for the violating organization or individual to take appropriate measures to eliminate or mend the violation element on the goods and business means but he/she/it deliberately does not comply or comply below the requirement.

12.3. The confiscation of violating goods of which the origin cannot be identified as stipulated in Point d, Clause 2, Article 18 of the Decree can be applied only when all the following conditions are gathered:

- The relevant industrial property owner has supplied all necessary papers to prove that the violating goods are not put on sale by himself/herself with his/her consent;

- There is a written pledge of the person who asks the confiscation to pay damages to the goods owner if later the competent agency determines that the confiscated goods are not violating goods or there are not enough grounds to conclude that these are violating goods;

- There has been a request of a competent person to stop the violation but the offender still deliberately continues or repeats the violation after he/she/it has been served with a warning or a fine for a violation of the same type earlier.

12.4. In case the competent person decides to confiscate the goods suspected of violation without request of the denouncer as well as the conditions stipulated in Point 12.3 mentioned above, the responsibility for compensation for damage to the goods owner rests with the person who decides the confiscation if later the confiscated goods are found not violating goods or there are not enough grounds to conclude that these are violating goods.

13. Other measures:

13.1. Other measures of handling acts of violation shall be taken when it is deemed necessary to prevent further violation and overcome the consequences of violation, in conformity with corresponding stipulations in Articles from 5 to 9 of the Decree, depending on specific cases and only when applied in conjunction with the main form of sanction. More concretely:

a/ Removal of the violation elements by removing parts or sections of products which are violation elements, stamping or erasing violation signs and indications on the product, business and service facilities in order to prevent possible relapse of the violation;

b/ Public rectification of wrong information which causes the violation by publishing apologies and rectification on the same facilities or products which carry the violating information earlier; on mass media or in apologies and rectification documents sent to the industrial property owner, and related subjects which are affected by such wrong information so that the forms, scope and the means carrying the rectification correspond with the scope of violation.

c/ Compulsory industrial property obligations that must be done may be forcible registration of the trademark for the relevant products, forcible making and registration of the industrial property right transfer contract as prescribed, forcible proper use of the trademark and appellation of origin of goods and industrial design as registered, and forcible inscription of the indication on the products as prescribed;

d/ Products bearing signs of violation must be destroyed. Depending on concrete situations, this may be a business transaction paper, a catalogue, an operation manual, leaflet, logo, advertisement sample, trademark sample, label, decal, package;

e/ Forcible destruction of the violating goods can be applied only in cases where the goods have no use value or fail to meet the quality criteria as prescribed and may be harmful to human health or cannot be handled by measures stipulated in Clause 2, Article 19 of the Decree.

f/ With regard to compensation for damage, if the parties can agree on non-compensation or on the level of compensation, the person with sanctioning competence shall recognize this agreement and record it in the sanctioning decision. In case the parties cannot agree on the amount of compensation: if it is up to 1,000,000 VND, the competent person shall base himself/herself on the actual consequence of the damage to decide the compensation level and record it in the sanctioning decision; if it is more than 1,000,000 VND, he/she shall request the parties to initiate a lawsuit at Court according to the civil procedures and clearly record this in the sanctioning decision.

13.2. Past the statute of limitations for sanctioning administrative violations, no sanction shall be imposed but other measures may be applied as stipulated in Points a, b, d, Clause 3 of Article 11 of the Ordinance.

13.3. Cases where application or carrying out of other measures of handling may be exempted:

a/ If the industrial property owner agrees or requests non- application or non-performance or exemption of the application of compulsory rectification or apology, the competent person may allow exemption of the application or carrying out of this measure if he/she deems that such act can cause damage chiefly to the industrial property owner;

b/ If the offender reaches agreement with the industrial property owner on the granting of license allowing the continued production and trading of the goods or the provision of services which have been concluded to have illegally used the relevant object of industrial property, the person with sanctioning competence may allow exemption of the application or use of these measures: compulsory removal of violating elements, confiscation of the violating goods and business means and services, destruction of violating products and goods, if the production and business activities conducted under that license meet the conditions stipulated in relevant legislation and do not affect the consumers and economic management order.

14. Inventory, sealing, temporary seizure of goods and means of industrial property violation:

14.1. The persons with competence of temporarily seizing material evidences and means of violation as stipulated in Clause 1, Article 17 of the Decree are: head of the district level police, head of the economic police bureau, head of the border-gate customs and head of the market management group.

The inspector and head of the inspection team specialized in industrial property are not entitled to effect temporary seizure of the material evidences and violating means but may, when necessary, seal and make an inventory of these evidences and means and assign them to the charge of the owner, and when necessary, may request the competent person to issue the decision on temporary seizure (Article 9 and Article 24 of the Inspection Ordinance). The sealing and inventory must be written in the violation record and the decision on sealing and inventory.

14.2. The competent person can issue the decision on temporary seizure only when there are realistic details in the circumstances stated in Clause 2, Article 17 of the Decree and must record these details in the violation record and the temporary seizure decision.

14.3. With regard to the goods suspected of violation of which the origin cannot be identified, the competent person can decide their temporary seizure only when there are all the following conditions:

a/ The related industrial property owner asks for their temporary seizure and supplies evidences and reasonable arguments that these goods are not put into circulation by the industrial property owner or the person authorized by him to bring to the market, including foreign markets;

b/ There is a written pledge of compensation for damage of the industrial property owner, if later the competent agency determines that the seized goods are not violating goods or that there are not enough evidences to conclude that these are violating goods.

In case the competent person decides the temporary seizure of the goods suspected of violation without request of the denouncer nor the conditions stipulated at Point 14.3 above, the responsibility for paying compensation for damage to the goods owner shall rest with the person who has decided the temporary seizure if later the goods are determined not to be violating goods or there are not enough evidences to conclude that these are violating goods.

14.4. The time limit of a temporary seizure is 15 days. This may be longer if the case involves complicated details but must not exceed 30 days after the seizure decision is issued.

IV. SANCTIONING COMPETENCE AND PROCEDURES

15. Scope of guidance on sanctioning competence and procedures

The sanctioning competence and procedures are stipulated in Chapter 3 (from Articles 10 to 20) of the Decree. Following are some further guidances and special points on this question.

16. Cooperation among agencies with sanctioning competence

16.1. Specialized industrial property inspectorate:

The specialized industrial property inspectorate: the specialized industrial property inspector; the specialized industrial property chief inspector from the Science, Technology and Environment Service; the specialized industrial property chief inspector from the Ministry of Science, Technology and Environment stipulated in Article 11 of the Decree are correspondingly the inspector of the Ministry of Science, Technology and Environment, the inspector of the Science, Technology and Environment Service, the science, technology and environment inspector, the chief inspector of the Science, Technology and Environment Service and the chief inspector of the Ministry of Science, Technology and Environment.

16.2. In case an act of violation of an organization or individual occurs in many different localities, the competent agency that first detects it shall have to make a written record, suspend the violation and inform the competent agency where the main office of the violating organization is located (for individuals this is his/her permanent residence) and ask it to receive and handle the case and this agency must notify the competent relevant agencies in the locality thereof so that they may cooperate in handling the violation on the principle: all acts of violation shall be sanctioned and each act can be sanctioned only once.

16.3. In case many organizations and individuals take part in one act of violation involving close relationships and such act occurs in many different localities, the competent agency that first detects the violation shall handle such administrative violation in its locality and at the same time shall have to notify the competent agencies in related localities thereof in order to coordinate in handling the violation and ensure the principle that all acts of violation shall be sanctioned and each act of violation can be sanctioned only once.

For organized and large scale violations which, however, are not serious enough to be examined for penal liability, the central competent agency shall assume the prime responsibility over and cooperate with the localities in handling.

16.4. When an act of violation is deemed subject to a level of sanctioning and measures under the competence of the branch managing agency or the higher managing agency of the administrative unit (territory), a report must be made and sent to the higher competent agency together with the dossier of the case for settlement. When the case is deemed subject to a level of sanctioning and measures of handling beyond its competence, the branch managing agency shall draw up a report and transfer the dossier of the case to the competent agency managing the local administrative unit for settlement.

16.5. In case the violation described at Clauses 1, 3, 4 and 5 of Article 9 of the Decree involves complicated circumstances related to industrial property specialty, the agency handling the case shall transfer the dossier to the specialized inspectorate for settlement if such act comes under the sanctioning competence of this inspectorate or make a written document to propose industrial property expertise evaluation as stipulated at Clause 3, Article 14 of the Decree, and Section V of this Circular as a basis for issuing the sanctioning decision.

17. Distinction between administrative handling procedures and proceeding procedures at the court

17.1. For the acts of violation concerning protection, obligation and indications on industrial property rights, author?s right over invention, utility solution, industrial design of serious character such as large-scale violation (in terms of production scale, quantity and value of violating goods), causing serious social, economic consequences (health, environment, interests of consumers, national prestige?), repeated recidivism, the competent person handling the case shall have to consult the people?s procuracy of the same level on how to handle before deciding the sanction. In case the violation has signs constituting a criminal offense as stipulated by the Penal Code (on counterfeit, trading of counterfeit goods, deception of customers, infringing upon the industrial property rights), the dossier must be sent to the competent people?s procuracy to propose prosecution of this crime according to the criminal procedures.

17.2. For acts of infringement upon industrial property rights that have been settled according to the civil procedures, the agency competent to administratively sanction shall not handle them according to stipulations on administrative sanctioning. If an act of rights infringement is concurrently sued before the court according to the civil procedures and denounced according to the administrative procedures, such act shall be settled according to the civil procedures at a competent court. The agency competent in administrative sanctioning that has handled the case shall send the dossier of the case to the competent court if so requested, at the same time shall have to notify in writing the denouncer thereof within the time limit of handling denunciations as prescribed.

17.3. In case the violation concerning the protection of the right to use industrial property object (infringement upon rights) stipulated in Article 9 of the Decree involves dispute over the compensation for damage valued at more than 1,000,000 VND as stipulated at Clause 3, Article 3 of the Decree, the agency handling the case shall guide the industrial property owner to initiate a lawsuit against the act of infringing upon rights according to the civil procedures. If the industrial property owner initiates a lawsuit against the act of rights infringement at the court, the agency handling the case shall send the dossier to the competent court. If he/she only takes the suit to the court over the compensation for damage but not over the act of rights infringement, the competent person shall also issue the decision on administrative sanctioning for the act of rights infringement according to the procedures stipulated in Article 14 of the Decree, but must write in the sanctioning decision that the compensation for damage shall be settled according to the civil procedures.

V. REQUEST FOR EVALUATION IN INDUSTRIAL PROPERTY

18. The evaluation requester

18.1. The following persons are entitled to request an evaluation in industrial property:

a/ The person with sanctioning competence who is handling the violation;

b/ The industrial property owner and others related to the violation;

c/ The persons with right to request evaluation may directly or authorize another to make a request for evaluation. The authorization shall comply with Point 4, Circular No. 3055/TT/SHCN of December 31, 1996 of the Ministry of Science, Technology and Environment.

19. Written request for evaluation:

19.1. The request for evaluation must be made in writing specifying the contents to be subject to the evaluation and attached to evidences (documents, photos, samples of violating products?) available to the requester.

19.2. The request for evaluation shall include the following:

a/ Legal status of the related industrial property object;

b/ Conclusion on the object suspected of containing violation elements.

20. Competence and responsibility in evaluation:

The State agencies competent and responsible for evaluation in industrial property are the Industrial Property Office and the Science, Technology and Environment Services. The evaluation is assigned to the following echelons:

20.1. The Science, Technology and Environment Service of the locality where the object suspected of containing violation elements exists or where the violation organization is located or the violating individual is residing- has the competence and responsibility of receiving and answering the request for evaluation of the following objects:

a/ The person with competence to handle affairs of local State agencies in the same locality;

b/ The industrial property owner and the persons related to the violation.

20.2. If the case involves many complicated circumstances and the local Science, Technology and Environment Service deems that it is unable or does not have enough conditions to make an evaluation conclusion, within three working days after receiving the written request for evaluation, it must send this request together with a written proposal to the National Office of Industrial Property to ask for evaluation.

20.3. The National Office of Industrial Property has the competence and responsibility to receive and answer the request for evaluation of the following objects:

a/ The person with sanctioning competence at a central State agency.

b/ The industrial property owner, and persons related to the violation.

c/ The Science, Technology and Environment Services in the provinces and cities.

21. Written record on evaluation conclusion.

21.1. Contents of evaluation conclusion record:

- The evaluation conclusion record must fully record the opinions on each content of the request based on the provisions of the current legislation on industrial property;

- For the contents having enough evidences and grounds for conclusion, these evaluation conclusions and grounds must be fully recorded;

- For the contents which have not enough evidences and grounds for conclusion, the evaluation conclusion record must put out some hypotheses about possible eventualities based on the existing evidences and grounds. Those contents which do not have enough evidences or grounds for conclusion must also be written in the evaluation record.

21.2. Legality of evaluation conclusion record:

The evaluation conclusion record must be signed and sealed by the head of the agency or the legal mandatory.

The contents of the evaluation conclusions shall constitute one of the legal grounds for the competent person to issue decision on administrative sanctioning as well as other appropriate handling decisions for the material evidences and acts of violation.

The signatory must take responsibility for the legality of the evaluation conclusions and the legal consequences of these conclusions.

22. Time-limit for evaluation

The agency entitled to request evaluation shall base itself on the dossier and evidences of the case supplied to it and on the current provisions of law to make a written suggestion for conclusion on the contents stated in the request within a time limit of 10 days after reception of the complete dossier of the case.

The time for the evaluation requester to supply evidences and explanations shall not be included in the said time limit for evaluation.

23. Revaluation

In case he/she disagrees with a part or the entire conclusions of the evaluation by the Science, Technology and Environment Service or in case of divergence of opinions among the Science, Technology and Environment Services about the same case, within 3 days after receiving the written evaluation conclusion record, the requester may ask for revaluation at the National Office of Industrial Property. The National Office of Industrial Property shall revaluate the whole of the contents in the request within 10 days after receiving the written request and the full dossier of the case.

In case there exist new evidences related to the contents of the request for evaluation, the requester may ask the agency that has evaluated these contents to conduct another evaluation based on the supplementary evidence (evidences) according to the same procedures as for the first request of evaluation, not the procedures for revaluation.

In case they disagree with the evaluation results of the National Office of Industrial Property, the concerned parties may propose that the Ministry of Science, Technology and Environment set up an Evaluation Council according to regulations on evaluation.

24. Request for supply of evidences and explanations

In the process of evaluation the agency with evaluation competence may request the evaluation requester to supply necessary evidences or explanations for the evaluation within a specific time limit. The evaluation requester must supply the evidences or explanations within the prescribed time limit. Upon expiry of that time limit, the evaluation agency may make its own conclusion based on the existing evidences.

The supplier of evidences must take responsibility for the truthfulness of the evidences supplied to the evaluation agency as prescribed by current law provisions.

25. Evaluation fees

The evaluation requester shall pay an evaluation fee as prescribed.

In case it is concluded that an organization or individual violates the legislation on industrial property, such violating organization or individual shall have to pay the fee. If the requester is not the violating organization or individual, the violating organization or individual shall have to repay the fee to the evaluation requester who has paid it.

VI. DENUNCIATIONS AGAINST VIOLATIONS OF INDUSTRIAL PROPERTY LEGISLATION

26. Denunciation against acts of violation of industrial property legislation

26.1. All organizations and individuals, including producers, businessmen, consumers and State agencies and social organizations have the right to denounce acts of violation of industrial property legislation to the competent agencies with a view to handling these violations. The denouncer has the obligation to supply evidences and concrete information on the acts of violation to the competent State agencies and shall have to take responsibility for this denunciation. Upon receiving the denunciation, the competent agency has the responsibility to settle the denunciation according to the provisions at Chapter IV of the Law on Complaints and Denunciations.

Non-resident foreign individuals, or foreign legal persons without legal representatives or genuine production and business activities in Vietnam shall make the denunciation through a Vietnamese industrial property representation service organization.

26.2. The denouncer has the obligation:

a/ To supply documents and titles (copies certified by the National Office of Industrial Property or the State Notary Public, if he/she is the property owner), affirming the entity, object, scope and content of the industrial property right under protection related to the violation;

b/ To supply evidences against the act of infringing upon the rights of the industrial property object being protected and other acts of violation of the legislation on industrial property.

26.3. The denouncer must take full responsibility for the contents of the denunciation and the evidences that have been supplied to the person with competence to handle the violation. If the content of the denunciation or the evidences are concluded by the competent State agency to be untruthful, the denouncer shall have to pay compensation for the damage caused to the denounced and related persons. If the act is intentional, he/she may be subject to administrative or criminal handling depending on the seriousness of the violation.

27. Notifying the industrial property owner, requesting him/her to supply evidences.

27.1. For acts of infringing upon industrial property rights, the person with sanctioning competence should inform the related industrial property owner and request him/her to supply the title of protection, documents certifying the owner of the right, the status and scope of protection of the related industrial property object as well as other necessary information in order to determine the act of violation and appropriate measures of handling the violation and material evidences of violation.

27.2. The industrial property owner has the obligation to supply documents and necessary documents, evidences and information for the handling of the violation at the request of the persons with competence to handle the violation and may give explanations and proposals on appropriate measures of handling to ensure his/her legitimate rights and interests.

28. Cases of non-handling of denunciation letter and non-application of sanctioning prescriptions

The agency with competence to handle violations shall not handle the letter denouncing a violation in the following cases:

28.1. The denounced act of violation is committed at a time outside the sanctioning statute of limitations;

28.2. The industrial property right over the object of industrial property is an object of the act of violation outside the time limit and scope of protection written in the title of protection and the related certificate of license contract.

28.3. The acts and affairs denounced have also been sued at the Court and the denunciation is being handled by the Court or about which the court has issued a judgment or decision.

VII. IMPLEMENTATION EFFECT

29. This Circular takes effect 15 days after its signing. The unsettled cases left pending up to the effective date of this Circular shall be settled as prescribed in this Circular. In awaiting for the Ministry of Finance to issue a regulation on industrial property evaluation fee, the National Office of Industrial Property and the Science, Technology and Environment Services shall provisionally collect evaluation fees at the rate applied to the complaints about infringement on rights stipulated in Circular No. 23/TC-TCT of May 9, 1997 on the collection, remittance and use of industrial property charges and fees.

For the Minister of Science,

Technology and Environment

Vice Minister
HOANG VAN HUAY